The Good, The Bad, And The Ugly Of Contract Management In Aircraft Leasing

January 16, 2025

In the world of commercial aircraft leasing, contracts are everything—they define relationships, mitigate risks, and ensure that multi-million-dollar assets are properly managed across their lifecycle. But anyone who’s been in the trenches knows that managing these contracts isn’t always smooth flying. 

Here are a few key takeaways on what makes contract management in aircraft leasing uniquely complex—and uniquely rewarding:

THE GOOD: A WELL-STRUCTURED LEASE CREATES VALUE

A well-crafted lease is more than just a legal document—it’s a strategic tool that ensures operational clarity, aligns incentives between lessor and lessee, and maximizes asset value.

The best contracts clearly define:

• Maintenance obligations—ensuring the aircraft is returned in a condition that maintains its residual value
• Return conditions—so there’s no ambiguity when the lease term ends
• Flexibility clauses—to allow for smooth mid-term adjustments (especially valuable during market disruptions)

When done right, lease management builds trust and long-term relationships between lessors and operators—relationships that can lead to repeat business, creative financing structures, and even joint ventures.

THE BAD: COMPLEXITY CAN SLOW YOU DOWN

Aircraft leases are notoriously detailed and can easily run hundreds of pages. The layers of complexity—covering everything from technical obligations to insurance requirements—can slow down negotiations, especially when counterparties aren’t aligned on key terms.

Common pain points include:

• Cross-jurisdictional compliance—leases often span multiple regulatory environments, requiring intricate legal structuring
• Data management—tracking maintenance reserves, lease payments, and return conditions across dozens (or hundreds) of leases is no small feat

Without robust systems and experienced teams, managing these details can become overwhelming and increase the risk of costly errors.

THE UGLY: DISPUTES CAN GET MESSY

Despite the best planning, disputes happen. Whether it’s about early returns, missed payments, or maintenance disagreements, even a minor issue can escalate quickly.

Disputes often arise from:

• Ambiguous language—poorly worded clauses leave too much room for interpretation
• Unforeseen market events—such as economic downturns or geopolitical crises that strain lessee cash flows.

The key to navigating these challenges? Having a proactive, well-prepared team that understands not just the legal framework, but also the commercial realities of the leasing business.

Lessons Learned: How To Keep Things In The “Good” Zone

Successful contract management in aircraft leasing boils down to a few critical factors:

1. Be precise—Ambiguity is your enemy. Every term, every clause, every obligation needs to be crystal clear;
2. Invest in systems—A solid contract management system can be the difference between a seamless operation and a chaotic one; and
3. Stay flexible—Even the best contracts need human judgment and adaptability to respond to changing circumstances.

HOW ZEEVO CAN HELP.

Contract management in aircraft leasing isn’t always glamorous—it’s detailed, complex, and at times frustrating. But when done right, it’s a powerful enabler of growth, trust, and profitability.

At Zeevo Group, we help lessors refine their contract management processes and build workflows that improve accuracy, reduce risk, and ultimately deliver better value for their organizations. If you’re facing challenges with your contract management, we’d be happy to chat about leading practices and lessons learned.